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Canadian cities crack down on Airbnb and others

Toronto City Council has passed new rules to crack down on short-stay accommodations like Airbnb, Toronto real estate lawyer Matthias Duensing tells The Lawyer’s Daily.

“Ever since Airbnb disrupted the short-stay accommodation sector by providing a platform by which homeowners can offer in-home accommodations for travellers, cities have been scrambling to deal with its effects on neighbourhoods, and how to regulate the growing and seemingly unstoppable new industry,” writes Duensing, principal of Duensing Law.

Several Canadian cities have taken steps over the last year to try to regulate the proliferation of Airbnb rentals, he says. Toronto’s new rules take effect July 1, 2018, while Vancouver’s updated bylaws will be in force April 1, 2018.

“The primary criticism levelled at the short-term accommodation market is the effect on the availability and affordability of long-term rental housing units. With landlords and investment owners being able to make far more through Airbnb than through a long-term lease, the shortage of affordable rental units has created a housing crisis in San Francisco, Berlin and Vancouver,” Duensing writes in the online legal publication.

Many cities have struggled to control a sector that doesn’t fall within the standard definitions and guidelines of the hotel industry, he says.

“Traditional approaches to handling nuisance complaints linked to Airbnb rentals have fallen short. In the City of Mississauga, an absentee owner/landlord has created a neighbourhood nightmare for residents of a formerly sleepy suburban enclave, with the entire home being rented to large groups of people, having loud parties, yelling at night, throwing garbage and beer bottles in the streets, and illegal parking, sometimes on a weekly basis.

"The efforts of neighbours, police, the local councillor and bylaw officers have yet to curb the bad behaviour. There have been similar reports of nuisance complaints linked to Airbnb rentals across the country.”

The same thing has been happening with condominiums, leading some condo corporations to create new rules to restrict the short-term rental of units. But, says Duensing, enforcing condominium bylaws can be “quite challenging.”

“Provinces have also been mindful of the potential housing crisis caused by short-term accommodations. The Ontario provincial budget of 2017 proposed amendments to the City of Toronto Act, 2006 to allow Toronto to charge a tax on ‘transient accommodations’ (which would include short-term rentals), and amendments to the Municipal Act, 2001 to permit other cities across Ontario to charge the same. Toronto’s regulations include a $1 per night tax per booking,” he writes.

In an attempt to increase affordable, long-term rental spots, Vancouver and Toronto passed regulations that limit short-term rental accommodations to the host’s primary residence, Duensing explains.

“This means that ghost investment properties, and secondary suites within a primary residence (such as basement apartments with its own entrance, kitchen and bathroom) will be prohibited from the respective short-term rental markets.”

Duensing says municipalities have also considered:

  • Setting limits on the number of days a unit may be rented per month or per year;
  • Creating a licensing and registration system for hosts;
  • Whether entire homes can be rented out, or just rooms within a home;
  • Establishing a process for apartments and condominiums to allow short-term accommodations;
  • A cap on the number of licences an individual can hold;
  • Whether long-term renters can be hosts; and
  • Creating an enforceable system to deal with breaches and nuisance complaints.

“Airbnb Canada has stated that it will work with cities to educate hosts, and can work with governmental bodies regarding the collection of taxes, but that the onus remains with the host to comply with local laws,” says Duensing.

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